A socialist newsweekly published in the interests of working peopleVol. 66/No.1January 7, 2002

Our publishing scheduleThis is a two-week issue of the Militant. Our next issue will be published and sent to distributors and subscribers January 3.

lead article
Argentine workers rebel
against capitalist collapse
State of siege decreed; troops open fire;
12 killed and 150 wounded

BY RÓGER CALERO
AND MARTÍN KOPPEL
Working-class protests have exploded in cities across Argentina in face of unprecedented unemployment, plunging living standards, and moves by the government to take even more out of the hides of working people in order to pay U.S. banks and other international creditors.

In response, President Fernando de la Rúa declared a 30-day state of siege December 19, as cops fired rubber bullets and tear gas at crowds of workers protesting or breaking into supermarkets to get food and clothing in dozens of cities. At least 12 protesters have been killed and 150 wounded.

A week earlier, the unions held a one-day general strike, shutting down the country.

Saddled with a $132 billion foreign debt, the Argentine government is now bankrupt, unable to keep up with the never-ending interest payments demanded by imperialist creditors.

As it pleads with the International Monetary Fund for more loans to pay on old loans, the capitalist government's main solution has been to slash pensions and wages of state employees, raise taxes, impose a partial freeze on bank withdrawals, and send in the riot police when workers protest. Already hit by a de facto currency devaluation, working people face the ruinous prospect of "dollarization," the establishment of the U.S. dollar as the official currency.

The December 13 general strike, the seventh in the two years of the administration of Fernando de la Rúa, was a protest against the latest round of government austerity measures. Organized by the two wings of the General Confederation of Labor (CGT), and the Argentine Workers Federation (CTA), it mobilized millions of workers in private industry and state employees.

The strike also involved a significant number of small business owners, squeezed by debt and high interest rates. A major demand of the protest was the lifting of a recent decree that limits bank withdrawals to $250 a week. The government imposed this measure to prevent a run on deposits and the evaporation of foreign reserves caused by fears of the devaluation of the peso.

The day before the general strike, thousands of working people joined in marches and rallies, as jobless workers demanding unemployment benefits set up road blocks in streets and highways leading into Buenos Aires. Shop owners organized "blackouts," shutting down store fronts. Residents of many working-class neighborhoods in the capital city organized noisy cacerolazos, in which protesters banged pots and pans from their doors and windows.

Retired workers mobilized in force. In face of the mass protests, the government backed off its earlier decision to delay pension payments by a week. Retirees receive a paltry pension of $150 a month.

Protesting teachers in Buenos Aires province, who have not yet received their November paychecks, were told they would be paid their full December wages--not with pesos but with the hated patacones, one-year "bonds" viewed as increasingly worthless scrip.

Demand for unemployment insurance
During the weekend of protests, the Front against Poverty, a coalition led by the CTA, announced the results of a "referendum" it had organized to campaign for establishing unemployment insurance, which does not exist for most workers in Argentina. An estimated 3 million people took part in the symbolic vote. Virtually all voted in favor of the proposal to establish unemployment benefits of $380 a month for heads of households, plus $60 for each school-age child. CTA leaders are asking Congress to enact the measure.

The street protests and marches were met with police repression in several cities. In some cases, street battles erupted when the workers defended themselves. In Neuquén the cops unleashed tear gas and rubber bullets on a demonstration of 6,000 state workers. Demonstrators trashed several government buildings and automatic teller machines.

Some 800 rail workers at Ferrexpreso Pampeano in Buenos Aires province went on strike December 17 demanding payment of back wages from November. The next day the bosses gave in to the unionists. "This was a display of solidarity at a time when it isn't easy to strike and when workers face getting fired. Nevertheless, the strike was solid," said union official Omar Maturano, the Buenos Aires daily Clarín reported.

The surge of protests comes as the Argentine government seeks to meet the demands of the IMF and wealthy bondholders in imperialist countries by shifting the burden of the crisis onto the backs of workers and farmers.

In an attempt to win the confidence of foreign banks and investors, the Argentine minister of the economy, Domingo Cavallo, announced December 17 a proposal to slash $10 billion in social spending as part of the 2002 national budget plan. He also threatened more cuts in wages and pensions of state workers--already cut by 13 percent--if the government does not "balance the budget."

On December 5 the IMF suspended the disbursement of a $1.3 billion installment of a previously approved $22 billion loan, demanding the government adopt a national budget that meets the approval of the international creditors. To appease the IMF, Cavallo eliminated a tax break for businesses, hoping to make an additional $4 billion available for debt payments.

In an admission of its de facto default on the debt, the de la Rúa administration promised that the December payments of more than $900 million would be made as soon as the IMF released the funds. Nonetheless, interest payments on bonds totaling $121 million came due December 14–19 and were not paid.

Unprecedented joblessness
While the bondholders complain they are not getting their promised billions in debt payments, for millions of working people in Argentina conditions are at the breaking point.

The official unemployment rate--which undercounts joblessness--now reaches 18.3 percent. In the Greater Buenos Aires area, the main industrial center, four out of 10 workers are unemployed or only work a few hours. In October government officials reported that nearly 5 million people in the country are unemployed or underemployed.

As unemployment has risen, per capita income has fallen by 14 percent since the recession began four years ago. Some 14 million of the 36 million inhabitants of Argentina live below the official poverty line today.

In mid-December, crowds of unemployed workers and their families in Rosario, Mendoza, and other cities began to gather in front of supermarkets and distribution centers to demand the distribution of food, and in many cases surged into the stores to take food and other goods.

The situation exploded December 19. Thousands of people sacked hundreds of supermarkets and stores in more than 20 cities and towns across northern Argentina. "Entire families, including children, climbed over fences and filled supermarket carts with cooking oil, food and toilet paper," New York Times correspondent Clifford Krauss reported, adding that antigovernment demonstrators blocked roads and city streets.

Battle zone in downtown Córdoba
In the industrial city of Córdoba, public employees protesting wage cuts trashed government offices. Riot cops stormed city hall and attacked protesters, while filling the downtown with tear gas and rubber bullets.

"The palm-lined avenues became virtual battle zones, as demonstrators taunted the police by throwing rocks at them," Krauss wrote.

The protests have rocked the capital as well. "By late afternoon the near-anarchy reached downtown Buenos Aires, with police armed with night sticks and tear gas grenades wading into crowds of looters."

Capitalist government officials, living in a different world from the workers being attacked with rubber bullets, dismissed the protests. "The looting is not about hunger," interior minister Ramón Mestre intoned. "They are stealing alcoholic beverages. This is a political matter."

In a run-down shopping district in San Miguel, on the outskirts of greater Buenos Aires, hundreds of people defied a police assault as they broke into food and clothing shops. One unidentified woman shouted, "We don't have any money, we are hungry, and we have to eat!" Police reported that 2,000 people took part in the rebellion.

That afternoon, the government cabinet, stunned by the rebellions, met in emergency session with secret police and top military officers, then announced the state of siege. The measure gives the president wide powers to suspend constitutional rights such as freedom of travel, press, and association, as well as union rights.

At the same time, with tear gas still thick in the air of many cities, de la Rúa released $7 million in food for impoverished working-class neighborhoods in an effort to undercut the protests.

The opposition Peronist party blamed de la Rúa and his ruling coalition for the crisis. But the government has been able to carry out these policies only with the cooperation of the Peronists, who control Congress and several provincial governments.

Former president Carlos Menem, who just a few weeks ago was facing charges of corruption and only recently was released from house arrest, is back on the political scene trying to negotiate an agreement on the budget proposal between the ruling coalition government and the Peronist Party he represents.

On December 20, Cavallo and the entire cabinet resigned. De la Rúa said he would accepted the resignations to clear the way for reaching an agreement with the Peronist opposition.

As the national economy collapses, the government is facing greater pressure to officially devalue the peso--ending the long-standing policy of pegging it to the dollar--or establish the U.S. dollar as the national currency.

Foreign investors are worried that the shock waves of the Argentine financial meltdown will spread to other shaky capitalist economies such as Brazil.

Officials of the imperialist financial institutions, however, have not budged from their insistence that the government come up with a "sustainable" economic program--that is, one that will guarantee continued payments to the bondholders.

"It's clear that the mix of fiscal policy, debt, and the exchange rate regime is not sustainable," declared IMF chief economist Kenneth Rogoff.

The protests erupting across Argentina, however, sent the message that, for millions of working people, what is unsustainable is the massive joblessness, social cutbacks, and police repression they are confronting.

Spanish-language CNN reported from Buenos Aires, "At midnight, thousands of people from different neighborhoods came out spontaneously onto the streets and, noisily banging pots and honking horns, rejected the [government's] economic policies and the state of siege." A huge crowd gathered in front of the presidential palace demanding economic relief and de la Rúa's resignation.

"It's great that Cavallo's gone," said Elena Sicilia, one of the protesters. "But they all have to go. We don't want de la Rúa and we don't want Menem back. We want a fair government of the people."